Sometimes I think we try and explain away pure evil by using mental incompetence as an excuse.

Therefore, we label those who are just plain evil as mentally ill. It helps us rationalize to ourselves how someone could commit horrendous crimes.

This.

Also - most people diagnosed with a mental illness do recover. Should someone who was briefly depressed ten years ago, but who recovered after a short round of treatment, be prohibited from owning guns for the rest of his life?

Also - laws or regulations that discourage mentally ill people from seeking treatment are a Bad Thing in and of themselves. If someone's feeling a bit crazy, I want them to race over to the doc's office and get treatment before they snap -- which they will not do if there's a law saying we'll take your guns away if you need treatment. I don't want them to hide their symptoms. I want them to fix what's wrong before they decide to take a samurai sword to the local school and chop the heads off all the kindergartners, or before they decide to nail the doors shut at a popular nightclub and set the place on fire. I want these guys seeking treatment, not hiding the crazy until someone's dead of it.

Also - Just as mentally ill people do usually recover with treatment, healthy people sometimes come down with a case of the crazies. How often would you want to check that all existing gun owners are still sane, and how many of their basic human rights are you willing to trample to make that happen?